Article
Why cryptocurrency may be exactly what your bank needs now
May 3, 2022 · Authored by Russell Sommers
With Super Bowl ads featuring celebrity spokespeople, at least one sovereign nation (El Salvador) accepting Bitcoin as legal tender and the Biden administration recently announcing an executive order for promoting “responsible digital asset innovation,” the wild world of cryptocurrency has gotten a lot more conventional.
Crypto is no longer the currency of outliers and speculators alone. In the United States, at least 16% of adults have invested in, traded or used cryptocurrency, according to a 2021 survey from the Pew Research Center.
For financial institutions that are not yet equipped to handle digital assets, consider this a friendly notice that now is the time to get up to speed.
Existing crypto exposure
At this point, it is almost impossible to be in banking and not already have at least some type of crypto risk exposure. With so many Americans interacting with digital assets, nearly every institution has sent money to companies dealing in crypto, whether they know it or not.
Preparing for the future wave
Even though the United States isn’t quite ready to issue its own central bank digital currency, financial institutions should be laying a foundation by building the technical infrastructure to able to handle that kind of banking in the future. Right now, they should consider giving their employees a better footing in the digital asset space by educating them and providing them with experience in facilitating transactions in stablecoin and transacting in crypto.
Risk and strategic assessments
Crypto may be less wild in many ways, but it’s still a complex arena. To help institutions get a clearer picture of how they can incorporate and capitalize on digital assets, they should engage a trusted third party with established experience in assisting other organizations in making the leap.
An outside party can perform a risk assessment and look at the institution’s corporate strategy to fully understand its internal skills and technological capabilities as well as its deficiencies. They can help an institution identify the kinds of products and services its customers want in addition to what fits the institution’s risk appetite. Further, they can help the bank get to the point where it can start offering those products and services, making certain they are structurally prepared as an organization.
